Without funding, your idea and dream may never reach it’s full potential. 90% of startups fail and one of the biggest reasons cited for this is due to lack of funding. Only 8 out of 10,000 business plans read by a VC fund will be chosen.
The statistics are stacked against startup success from the get go! Making it even more important to build our business right, from the start.
Most startups don’t know how to create the very best plan to implement from the beginning in order to have the greatest chances of growing successfully and raising capital.
Our roots and connections are firmly planted in Silicon Valley. Having had 20+ years entrenched in the Valley’s startups and community, we’ve learned a few things about what it really takes to succeed, and fail.
In fact, we’ve seen and experienced almost every possible scenario from every single aspect of starting a company in just about every industry possible.
Raising capital is a very strategic endeavor. It should be treated just like the most important marketing campaign you ever launch. Your company is the ‘Product’ and your potential investors and your ‘target customers.’ When you treat your capital raising efforts this way, your chances of success are far greater.
For a start-up, the capital sources may come from three leads – Friends and Family (F&F), Angel Investors, and VC Funds. But do you know which source to go after and how to do it right? Are you sure of how to create each component of your plan in order to beat those statistics? Do you know what to do next, what to expect, what to avoid and more importantly, how to pitch to win?
The 23 Biggest Mistakes We’ve Identified When It Comes to Raising Capital…
- Missing the timing of your market opportunity and investors know it
- Not having a pitch deck that actually works FOR you to win BIG in closing significant deals and investors
- Not knowing how to focus your mind, get out of your own way and not be your own worst enemy
- Not focusing on how you can create pre-sales and revenues right away
- Haven’t invested in writing the right business plan complete with elements, such as a cogent business description, financial projections and a competitive market analysis
- Failure to do a comprehensive industry & target market research and analysis that allows you to properly innovate a market leading product and clearly identify market opportunities
- Not smart and strategic in raising capital the right way, took a bad deal/debt, too many investors, diluted yourself – created a JOB!
- Making the top 5 legal mistakes:
- Advertising or soliciting investors
- Selling securities to non-“accredited investors”.
- Using an unregistered finder to sell securities.
- Not doing proper due diligence on the investors.
- Issuing preferred stock.
- While not working with a lawyer when you’re putting together a deal is dangerous, it’s also foolish to depend on your legal counsel for everything.
- Failing to get the proper legal agreements in place
- Complicated deal terms, and you don’t understand what you’re getting into
- Thinking you need to seek VC first…rather than seeking the right angel or debt
- Raising capital is a full time job so don’t make the mistake of thinking you can do the key jobs of 3 while raising money
- CEO Plays Lawyer
- Not knowing when to pivot, or if you do, not doing it!
- Not asking for enough money and you completely failed to estimate the exact costs of going to market
- Ran out of money because you have Poor cash flow management or not executing fast enough
- Not having an investable team – Too focused on the idea and not on the management that produces the best results
- Not asking for introductions because your next deal is 6 degrees of separation most likely to come from someone you know
- Inflating your company’s valuation purely based on an emotional attachment to your future “potential”
- Not following up
- Delegating a dedicated team member to handle ONE job extremely well
- Underestimating the energy, resources and time it takes to raise capital
Our why is at the core of everything we do and stand for here at Profit Ventures. We believe wholeheartedly in the omnipotence of entrepreneurship because there has never been a more important time in our history than now to support entrepreneurs. We work with brilliant entrepreneurs and innovators who are truly best in class, creating solutions to major industry problems. From technology, natural foods & products, wellness, marketing, human capital management, data, and transportation sectors, just to name a few.
We provide expert guidance for each and every step of the journey from developing exceptional products to launching startups and growing successful brands. We help entrepreneurs avoid costly mistakes and make the right decisions in product, business and brand development as well as investments along the way.
If you’re developing or launching a product or at the point in your startup growth phase where you are ready for development, mentorship, consulting, branding and marketing…talk with us.
In one call we can collaborate and create an actionable plan that starts you on the path, regardless of whether you choose to have us implement that plan with you, or not.